The first taxes collected from Minnesota’s new cannabis tax that took effect July 1 show that the hemp-derived market is smaller than estimated, or a lot of people selling edibles and beverages have not yet reported their taxes.
In the first month, the 10% sales tax brought in $594,461 from 571 businesses. That means total sales were $5.94 million. Of the total, $119,000 will be distributed to local governments and $475,000 to the state. The Department of Revenue (DOR) notes that those numbers reflect what had been received by August 21, and additional filings are likely.
The first month collections are close to, but still less than, estimates released in June by the state Department of Revenue, which assumed the new tax would raise $10.6 million in the first 12 months of collections. By the time the recreational market is fully in place, the DOR estimates that the cannabis tax will raise $68.6 million a year.
When the low-potency hemp-derived edibles law took effect last July, there was no direct way of knowing how many businesses were selling edibles and beverages because that law required no registration and lacked taxation separate from the general sales tax. With the May passage of House File 100, the hemp-derived program shifted from the Board of Pharmacy to the Department of Health. In addition, the first taxation of the industry started July 1, and by October 1, any business involved in hemp-derived products, including both manufacturers and sellers of edibles and beverages, must register with that department.
Read more at minnpost.com